May 10, 2010
Asia Pacific Industrial Market Overview
REGIONAL RESEARCH
B I - A N N U A L U P DAT E | M Ay | 2 0 1 0
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ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
Contents
This is the tenth issue of the Asia Pacific Industrial Market Overview, which covers 13 cities in 9 countries, for the review period of October 2009 to March 2010. With this biannual update, we hope to provide an overview of industrial markets catering to multi-national corporations and a comparison of industrial real estate costs across the key cities of the Asia Pacific. Three types of industrial properties are tracked in this report, namely single-user factory premises, single-user warehouse premises and multi-user high-specifications industrial premises, as these are the preferred choices of multi-national corporations. This publication features land and capital values, as well as rents of single-user industrial premises; and rents of multi-user high-specification factories.
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Greater Tokyo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 New Zealand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30-32 Auckland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Wellington . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Singapore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33-34 Taiwan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35-36 Taipei . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Definitions & Terminology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Regional Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 International Comparison. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-11 Single-user Warehouse Land Values, Capital Values and Monthly Gross Rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Single-user Factory Land Values, Capital Values and Monthly Gross Rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Multi-user High-Specs Average Monthly Gross Rents . . . . . . . . . . . . . . . . . 11 Local Market Norm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12-15 Single-user Warehouse Land Values, Capital Values and Monthly Gross Rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Single-user Factory Land Values, Capital Values and Monthly Gross Rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16-19 Melbourne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Sydney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20-25 Beijing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Guangzhou . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Shanghai . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Hong Kong SAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24-25 India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 New Delhi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Indonesia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27-28 Jakarta . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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COLLIERS INTERNATIONAL | REGIONAL RESEARCH
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
EXECUTIVE SUMMARy
Regional Overview
The industrial property market across most Asia Pacific cities surveyed finally stabilised after having stayed in the doldrums in the aftermath of the global financial crisis. The economies of the United States (U.S.) and Eurozone, which saw moderation in contraction in the previous six-month review period ending September 2009, turned around in the current review period ending March 2010. Global trade, too, turned the corner in this period. This has enabled the manufacturing sector in most cities in the Asia Pacific region to continue to improve. In particular, export-oriented cities such as those in China and Singapore, posted strong double-digit year-on-year (YoY) expansion in manufacturing output in 1Q 2010. Against this backdrop, demand for industrial properties firmed in most cities surveyed, led by demand in the sales and land market. As a result, values outperformed rents in the current six-month review period. In the sales market, private investors and owner-occupiers remained active, although institutional funds have begun to make a return to the investment scene after a 12-month lull, with acquisition activity concentrated in Singapore, Japan, Taiwan and Australia. In particular, Singapore saw the sale of six logistics facilities to Cache Logistics Trust for its impending listing in April 2010, while insurance companies in Taiwan continued to snap up quality high-specs buildings due to the relaxation of investment restrictions for insurance companies. The pick-up in demand in the sales market resulted in capital values of industrial properties in 43 of the 60 single-user submarkets surveyed hitting the bottom, firming by up to 14.3% in the six months between October 2009 and March 2010. The land market was active, too, with 41 of the 55 single-user submarkets surveyed ending the review period with their land values relatively unchanged or moderately higher than the levels of six months ago, reversing the downward trend seen in the last 12 months. Leasing activity also picked up pace; however, the strength of recovery lagged behind that witnessed for the sales and land markets. Hence, relatively more submarkets experienced soft rents than capital and land values during the period of review. Nevertheless, industrial rents have bottomed for a number of cities in the Asia Pacific region, including Delhi, Guangzhou, Hong Kong, Shanghai and Singapore. On the back of an expected continued recovery in global trade and economic growth, more manufacturers are expected to expand their operations. Hence, demand for industrial properties is expected to stage further growth. Land and capital values and rents of industrial properties are forecast to see a steady increase in the next 12 months for the majority of the industrial market segments.
COLLIERS INTERNATIONAL | REGIONAL RESEARCH
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ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
International Comparison
The purpose of the International Comparison tables is only to facilitate easy and equal comparison of single-user industrial costs. However, payment schemes vary with each country. Some countries may have the practice of paying annual land rent, whilst others pay lump sum land premium or through other modes. Colliers International does not infer that industrial land and buildings in these cities may be acquired through the same schemes or on the basis stated in the table.
SINGLE-USER WAREHOUSE
SINGLE-USER WAREHOUSE LAND VALUES, CAPITAL VALUES AND MONTHLY GROSS RENTS
VALUE AS OF MARCH 2010 (US$) CITY LAND VALUE1 (PSF) CAPITAL MONTHLY VALUE2 GROSS (PSF) RENT (PSF) 66.31 66.93 75.76 0.59 0.60 0.65 12-MONTH FORECAST (US$) LAND VALUE1 (PSF) CAPITAL VALUE2 (PSF) MONTHLY GROSS RENT (PSF) 0.61 0.61 0.67 bASIS OF LAND AND CAPITAL VALUES LAND TENURE (YEARS) PLOT RATIO LAND AREA (Sq FT) GROSS FLOOR AREA (Sq FT) 100,000 100,000 100,000
Auckland Auckland Manukau North Shore Beijing Tianzhu Tongzhou Greater Tokyo Chiba - Shibayama Chiba - Urayasu Kawasaki - Higashi Ogishima Tokyo - Ariake Tokyo - Heiwajima Tokyo - Shinsuna yokohama - Daikokufuto Guangzhou GETDD Hong Kong
3
16.27 13.95 21.24
16.82 14.00 22.05
68.57 69.21 78.34
60 60 60
1.0 1.0 1.0
100,000 100,000 100,000
16.29 9.08
73.06 56.84
0.40 0.35
16.77 9.54
73.06 57.92
0.40 0.35
60 60
1.0 1.0
100,000 100,000
100,000 100,000
3.61 46.38 33.77 118.83 120.05 151.59 14.77
89.76 120.08 167.75 207.56 267.50 254.67 147.17
1.13 1.23 1.66 1.85 2.53 2.10 1.62
3.61 46.38 33.77 118.83 120.05 151.59 14.77
87.97 117.68 164.39 203.41 262.15 249.58 144.22
1.13 1.23 1.66 1.85 2.53 2.10 1.62
60 60 60 60 60 60 60
1.0 1.0 1.0 1.0 1.0 1.0 1.0
100,000 100,000 100,000 100,000 100,000 100,000 100,000
100,000 100,000 100,000 100,000 100,000 100,000 100,000
8.73
48.74
0.38
9.02
49.76
0.40
60
1.0
100,000
100,000
Ramp Access Cargo Lift Access Jakarta Bekasi Melbourne East & South East Fringe North West
-
234.40 220.55
0.98 0.68
-
269.56 249.22
1.03 0.71
60 60
1.0 1.0
100,000 100,000
100,000 100,000
7.98
20.00
-
8.38
21.00
-
60
1.0
100,000
100,000
11.49 27.94 10.56 8.85
57.70 113.11 56.58 47.03
0.47 0.84 0.41 0.39
11.71 28.08 10.70 9.03
57.70 113.11 56.58 47.03
0.47 0.82 0.41 0.39
60 60 60 60
1.0 1.0 1.0 1.0
100,000 100,000 100,000 100,000
100,000 100,000 100,000 100,000
1. Land values are expressed in US$ per sq ft per plot ratio 2. Capital values refer to the values of both land and building 3. Values provided are for multi-user warehouse buildings
continued on page 5
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COLLIERS INTERNATIONAL | REGIONAL RESEARCH
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
EXECUTIVE SUMMARy
International Comparison
SINGLE-USER WAREHOUSE
SINGLE-USER WAREHOUSE LAND VALUES, CAPITAL VALUES AND MONTHLY GROSS RENTS (CONT'D)
VALUE AS OF MARCH 2010 (US$) CITY LAND VALUE1 (PSF) CAPITAL MONTHLY VALUE2 GROSS (PSF) RENT (PSF) 19.89 39.47 65.81 80.99 81.90 60.69 0.23 0.29 0.46 0.62 0.37 0.89 0.78 12-MONTH FORECAST (US$) LAND VALUE1 (PSF) CAPITAL MONTHLY VALUE2 GROSS (PSF) RENT (PSF) 21.04 40.55 66.54 83.36 83.36 61.43 0.24 0.30 0.47 0.65 0.39 0.90 0.80 bASIS OF LAND AND CAPITAL VALUES LAND TENURE (YEARS) PLOT RATIO LAND AREA (Sq FT) GROSS FLOOR AREA (Sq FT) 100,000 100,000 100,000 100,000 100,000 100,000 100,000
New Delhi Delhi - NH1 Delhi - NH8 Delhi - NH24 Delhi - East Delhi - North Delhi - South Delhi - West Shanghai Pudong New Area Singapore East Sydney South Southwest West Wellington Ngauranga Petone Seaview 33.38 34.21 15.05 69.70 61.76 54.84 0.55 0.49 0.43 48.22 33.35 13.92 69.70 61.76 54.84 0.55 0.49 0.43 60 60 60 1.0 1.0 1.0 100,000 100,000 100,000 100,000 100,000 100,000 59.22 15.10 26.99 137.42 86.16 126.36 1.06 0.69 1.06 59.22 15.10 26.99 144.44 90.67 132.99 1.12 0.72 1.12 60 60 60 1.0 1.0 1.0 100,000 100,000 100,000 100,000 100,000 100,000 39.12 113.14 1.05 43.04 124.61 1.10 60 1.0 100,000 100,000 38.06 53.14 0.48 38.06 53.14 0.50 60 1.0 100,000 100,000 17.57 34.67 100.27 143.82 178.83 192.26 17.97 35.15 103.48 146.88 184.28 198.45 60 60 60 60 60 60 60 1.0 1.0 1.0 1.0 1.0 1.0 1.0 100,000 100,000 100,000 100,000 100,000 100,000 100,000
1. Land values are expressed in US$ per sq ft per plot ratio 2. Capital values refer to the values of both land and building
COLLIERS INTERNATIONAL | REGIONAL RESEARCH
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ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
International Comparison
INTERNATIONAL COMPARISON OF WAREHOUSE LAND VALUES (MARCH 2010)
Delhi - West Delhi - South Greater Tokyo - Tokyo - Shinsuna Delhi - North Greater Tokyo - Tokyo - Heiwajima Greater Tokyo - Tokyo - Ariake Delhi - East Sydney - South Greater Tokyo - Chiba - Urayasu Singapore - East Shanghai - Pudong New Area Delhi - NH24 Wellington - Petone Greater Tokyo - Kawasaki - Higashi Ogishima Wellington - Ngauranga Melbourne - Fringe Sydney - West Auckland - North Shore Delhi - NH1 Beijing - Tianzhu Auckland - Auckland Sydney - Southwest Wellington - Seaview Greater Tokyo - yokohama - Daikokufuto Auckland - Manukau Melbourne - East & South East Melbourne - North Beijing - Tongzhou Melbourne - West Guangzhou - GETDD Jakarta - Bekasi Greater Tokyo - Chiba - Shibayama 0.00 20.00 40.00 60.00 80.00 100.00 120.00 140.00 160.00 180.00 200.00
Warehouse Land Values (US$ psf per plot ratio)
INTERNATIONAL COMPARISON OF WAREHOUSE CAPITAL VALUES (MARCH 2010)
Greater Tokyo - Tokyo - Heiwajima Greater Tokyo - Tokyo - Shinsuna *Hong Kong - Ramp Access *Hong Kong - Cargo Lift Access Greater Tokyo - Tokyo - Ariake Greater Tokyo - Kawasaki - Higashi Ogishima Greater Tokyo - yokohama - Daikokufuto Sydney - South Sydney - West Greater Tokyo - Chiba - Urayasu Singapore - East Melbourne - Fringe Greater Tokyo - Chiba - Shibayama Sydney - Southwest Delhi - South Delhi - North Auckland - North Shore Beijing - Tianzhu Wellington - Ngauranga Auckland - Manukau Auckland - Auckland Delhi - East Wellington - Petone Delhi - West Melbourne - East & South East Beijing - Tongzhou Melbourne - North Wellington - Seaview Shanghai - Pudong New Area Guangzhou - GETDD Melbourne - West Delhi - NH24 Jakarta - Bekasi Delhi - NH8 0.00 50.00 100.00 150.00 200.00 250.00 300.00
Warehouse Capital Values (US$ psf)
* Values provided are for multi-user warehouse buildings
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COLLIERS INTERNATIONAL | REGIONAL RESEARCH
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
EXECUTIVE SUMMARy
International Comparison
INTERNATIONAL COMPARISON OF WAREHOUSE MONTHLy GROSS RENTS (MARCH 2010)
Greater Tokyo - Tokyo - Heiwajima Greater Tokyo - Tokyo - Shinsuna Greater Tokyo - Tokyo - Ariake Greater Tokyo - Kawasaki - Higashi Ogishima Greater Tokyo - yokohama - Daikokufuto Greater Tokyo - Chiba - Urayasu Greater Tokyo - Chiba - Shibayama Sydney - West Sydney - South Singapore - East *Hong Kong - Ramp Access Delhi - South Melbourne - Fringe Delhi - West Sydney - Southwest *Hong Kong - Cargo Lift Access Auckland - North Shore Delhi - East Auckland - Manukau Auckland - Auckland Wellington - Ngauranga Wellington - Petone Shanghai - Pudong New Area Melbourne - East & South East Delhi - NH24 Wellington - Seaview Melbourne - North Beijing - Tianzhu Melbourne - West Guangzhou - GETDD Delhi - North Beijing - Tongzhou Delhi - NH8 Delhi - NH1 0.00 0.50 1.00 1.50 2.00 2.50 3.00
Warehouse Monthly Gross Rents (US$ psf)
* Values provided are for multi-user warehouse buildings
COLLIERS INTERNATIONAL | REGIONAL RESEARCH
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ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
International Comparison
SINGLE-USER FACTORy
SINGLE-USER FACTORY LAND VALUES, CAPITAL VALUES AND MONTHLY GROSS RENTS
VALUE AS OF MARCH 2010 (US$) CITY LAND VALUE1 (PSF) CAPITAL VALUE2 (PSF) MONTHLY GROSS RENT (PSF) 1.14 0.59 0.41 0.69 0.87 1.06 0.34 0.47 0.84 0.41 0.39 0.23 0.29 0.46 0.71 0.38 0.98 0.78 0.31 0.30 1.06 12-MONTH FORECAST (US$) LAND VALUE1 (PSF) bASIS OF LAND AND CAPITAL VALUES PLOT RATIO LAND AREA (Sq FT) GROSS FLOOR AREA (Sq FT) 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 CAPITAL MONTHLY LAND VALUE2 GROSS TENURE (PSF) RENT (YEARS) (PSF) 131.42 59.81 117.63 72.33 67.95 123.43 103.46 49.76 176.43 231.70 366.19 26.11 24.01 57.70 113.11 56.58 47.03 21.04 40.55 73.13 83.36 90.68 76.05 47.81 43.67 125.47 1.14 0.59 0.41 0.75 0.94 1.14 0.36 0.47 0.82 0.41 0.39 0.24 0.30 0.47 0.73 0.39 0.99 0.80 0.32 0.31 1.11 60 60 60 60 60 60 60 60 60 60 60 60 60 60 60 60 60 60 60 60 60 60 60 60 60 60 60
Beijing Shang Di yi Zhuang Greater Tokyo Chiba - Ichikawa Chiba - Mihama Saitama - Ageo Tokyo - Ota yokohama - Naka Guangzhou GETDD Hong Kong3 Low Quality Mid Quality Prime Quality Jakarta Bekasi Karawang Melbourne East & South East Fringe North West New Delhi Delhi - NH1 Delhi - NH8 Delhi - NH24 Delhi - East Delhi - North Delhi - South Delhi - West Shanghai Minhang District Pudong New Area Singapore Central 55.24 113.71 60.77 1.0 100,000 15.17 16.77 47.81 43.67 15.17 16.77 1.0 1.0 100,000 100,000 16.58 33.33 93.91 141.39 167.48 180.05 19.89 39.47 72.64 80.99 89.77 73.99 16.96 33.92 96.91 144.00 172.58 185.85 1.0 1.0 1.0 1.0 1.0 1.0 1.0 100,000 100,000 100,000 100,000 100,000 100,000 100,000 11.49 27.94 10.56 8.85 57.70 113.11 56.58 47.03 11.71 28.08 10.70 9.03 1.0 1.0 1.0 1.0 100,000 100,000 100,000 100,000 8.06 4.92 24.86 22.44 8.46 5.26 1.0 1.0 100,000 100,000 153.41 201.48 318.43 1.0 1.0 1.0 100,000 100,000 100,000 8.73 49.05 9.02 1.0 100,000 34.46 16.79 12.90 65.03 33.18 120.03 73.81 69.33 125.95 105.57 34.46 16.79 12.90 65.03 33.18 1.0 1.0 1.0 1.0 1.0 100,000 100,000 100,000 100,000 100,000 51.69 7.15 127.59 58.50 51.69 7.15 1.0 1.0 100,000 100,000
1. Land values are expressed in US$ per sq ft per plot ratio 2. Capital values refer to the values of both land and building 3. Values provided are for multi-user factory buildings
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COLLIERS INTERNATIONAL | REGIONAL RESEARCH
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
EXECUTIVE SUMMARy
International Comparison
INTERNATIONAL COMPARISON OF FACTORy LAND VALUES (MARCH 2010)
Delhi - West Delhi - South Delhi - North Delhi - East Greater Tokyo - Tokyo - Ota Singapore - Central Beijing - Shang Di Greater Tokyo - Chiba - Ichikawa Delhi - NH24 Greater Tokyo - yokohama - Naka Melbourne - Fringe Greater Tokyo - Chiba - Mihama Shanghai - Pudong New Area Delhi - NH1 Shanghai - Minhang District Greater Tokyo - Saitama - Ageo Melbourne - East & South East Melbourne - North Melbourne - West Guangzhou - GETDD Jakarta - Bekasi Beijing - yi Zhuang Jakarta - Karawang 0.00 20.00 40.00 60.00 80.00 100.00 120.00 140.00 160.00 180.00 200.00
Factory Land Values (US$ psf per plot ratio)
INTERNATIONAL COMPARISON OF FACTORy CAPITAL VALUES (MARCH 2010)
*Hong Kong - Prime Quality *Hong Kong - Mid Quality *Hong Kong - Low Quality Beijing - Shang Di Greater Tokyo - Tokyo - Ota Greater Tokyo - Chiba - Ichikawa Singapore - Central Melbourne - Fringe Greater Tokyo - yokohama - Naka Delhi - South Delhi - North Delhi - West Greater Tokyo - Chiba - Mihama Delhi - East Greater Tokyo - Saitama - Ageo Beijing - yi Zhuang Melbourne - East & South East Melbourne - North Guangzhou - GETDD Shanghai - Minhang District Melbourne - West Shanghai - Pudong New Area Delhi - NH24 Jakarta - Bekasi Jakarta - Karawang Delhi - NH8 0.00 50.00 100.00 150.00 200.00 250.00 300.00 350.00
Factory Capital Values (US$ psf)
* Values provided are for multi-user factory buildings
COLLIERS INTERNATIONAL | REGIONAL RESEARCH
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ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
International Comparison
INTERNATIONAL COMPARISON OF FACTORy MONTHLy GROSS RENTS (MARCH 2010)
Beijing - Shang Di Singapore - Central *Hong Kong - Prime Quality Delhi - South *Hong Kong - Mid Quality Melbourne - Fringe Delhi - West Delhi - East *Hong Kong - Low Quality Beijing - yi Zhuang Melbourne - East & South East Delhi - NH24 Melbourne - North Guangzhou - GETDD Melbourne - West Delhi - North Jakarta - Karawang Shanghai - Minhang District Shanghai - Pudong New Area Delhi - NH8 Delhi - NH1 0.00 0.20 0.40 0.60 0.80 1.00 1.20
Factory Monthly Gross rents (US$ psf)
* Values provided are for multi-user factory buildings
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COLLIERS INTERNATIONAL | REGIONAL RESEARCH
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
EXECUTIVE SUMMARy
International Comparison
MULTI-USER HIGH-SPECS
MULTI-USER HIGH-SPECS AVERAGE MONTHLY GROSS RENTS
AS OF MARCH 2010 CITY Beijing Hong Kong Melbourne New Delhi - NH1 New Delhi - NH8 New Delhi - NH24 New Delhi - East New Delhi - North New Delhi - South New Delhi - West Shanghai Singapore Sydney Taipei - Neihu Technology Park Greater Tokyo - Hakusan Greater Tokyo - Kanagawa Greater Tokyo - yokohama AVERAGE MONTHLY GROSS RENT (US$ PSF) 1.18 1.74 1.47 0.27 0.43 0.54 0.83 0.54 1.06 0.92 1.10 1.98 1.03 0.98 3.61 4.51 3.61 12-MONTH FORECAST AVERAGE MONTHLY GROSS RENT (US$ PSF) 1.18 1.95 1.47 0.28 0.44 0.56 0.86 0.56 1.08 0.95 1.13 2.00 1.03 0.99 3.01 3.61 3.01 3 3 3 Suburban Suburban Suburban LEASE TERM (YEARS) 3 3 3 3 to 9 3 to 9 3 to 9 3 to 9 3 to 9 3 to 9 3 to 9 3 3 3 bASIS OF RENTAL RATES LOCATION NET FLOOR RENT FREE AREA PERIOD (Sq FT) (MONTH) Suburban Suburban Suburban Suburban Suburban Suburban Suburban Suburban Suburban Suburban Suburban Suburban Suburban 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 1 1 1 1 1 1 Negotiable Negotiable Negotiable Negotiable Negotiable Negotiable Negotiable 1 1 1
INTERNATIONAL COMPARISON OF HIGH-SPECS MONTHLy GROSS RENTS (MARCH 2010)
Greater Tokyo - Kanagawa Greater Tokyo - Kanagawa Science Park Greater Tokyo - yokohama Greater Tokyo - yokohama Business Park Greater Tokyo - Hakusan Greater Tokyo - Hakusan Hi-Tech Park SingaporeSingapore Hong Kong Hong Kong Melbourne Melbourne Beijing Beijing Shanghai Shanghai New Delhi - South - South New Delhi Sydney Sydney Taipei - Neihu Technology Park Taipei - Neihu Technology Park New Delhi - West - West New Delhi New Delhi - East New Delhi - East New Delhi - North - North New Delhi New Delhi - NH24 - NH24 New Delhi New Delhi - NH8 - NH8 New Delhi New Delhi - NH1 - NH1 New Delhi 0.00 0.50 0.00 1.00 0.50 1.50 1.50 2.00 2.00 2.50 2.50 3.00 1.00 3.00 3.50 3.50 4.00 4.00 4.50 4.50 5.00 5.00
High-Specs Average Monthly Gross Rents (US$(US$ psf) High-Specs Average Monthly Gross Rents psf)
COLLIERS INTERNATIONAL | REGIONAL RESEARCH
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ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
Local Market Norm
The purpose of the Local Market Norm tables is only to provide an understanding of single-user industrial costs in the context of the various submarkets. The land tenure, plot ratio, land and building size quoted are based on recent offerings and transactions in each local market. However, payment schemes vary with each country. Some countries may have the practice of paying annual land rent, whilst others pay lump sum land premium or through other modes. Colliers International does not infer that industrial land and buildings in these cities may be acquired through the same schemes.
SINGLE-USER WAREHOUSE
SINGLE-USER WAREHOUSE LAND VALUES, CAPITAL VALUES AND MONTHLY GROSS RENTS1
IN LOCAL CURRENCY AS OF MARCH 2010 CITY LOCAL CURRENCY IN US$ AS OF MARCH 2010 bASIS OF LAND, CAPITAL VALUES AND MONTHLY GROSS RENTS (LOCAL MARKET NORM) GROSS FLOOR AREA (Sq FT) 15,000 50,000 52,500
LAND CAPITAL MONTHLY LAND VALUE2 VALUE3 RENT VALUE2 (PSF) (PSF) (PSF) (PSF)
CAPITAL MONTHLY LAND PLOT LAND VALUE3 RENT TENURE RATIO AREA (PSF) (PSF) (YEARS) (Sq FT)
Auckland Auckland Manukau North Shore Beijing Tianzhu Tongzhou Greater Tokyo Chiba - Shibayama Chiba - Urayasu Kawasaki - Higashi Ogishima Tokyo - Ariake Tokyo - Heiwajima Tokyo - Shinsuna yokohama Daikokufuto Guangzhou GETDD Hong Kong
4
NZ$ NZ$ NZ$
31.40 23.69 36.05
143.72 134.71 142.32
0.98 0.93 0.96
22.29 16.82 25.59
102.01 95.62 101.02
0.70 0.66 0.68
Freehold Freehold Freehold
0.5 0.5 0.5
30,000 100,000 105,000
CNy CNy
100.15 57.40
466.09 362.63
2.71 2.41
14.67 8.41
68.28 53.12
0.40 0.35
50 50
0.7 0.9
150,000 120,000
105,000 108,000
JPy JPy JPy JPy JPy JPy JPy
401 6,374 3,035 14,613 9,841 16,866 1,917
7,990 14,028 12,542 21,553 19,231 22,668 13,099
84 115 107 157 157 157 121
4.30 68.20 32.47 156.36 105.30 180.46 20.52
85.49 150.10 134.20 230.62 205.77 242.55 140.16
0.90 1.23 1.14 1.68 1.68 1.68 1.29
Freehold Freehold Freehold Freehold Freehold Freehold Freehold
2.0 2.0 3.0 2.0 3.0 2.0 4.0
215,278 53,820
430,556 107,640
1,076,390 3,229,170 107,639 215,278
1,614,585 4,843,755 215,278 107,639 430,556 430,556
CNy
56.23
284.40
2.34
8.24
41.66
0.34
50
1.5
150,000
225,000
Ramp Access Cargo Lift Access Jakarta Bekasi
HK$ HK$
-
1,820.00 1,712.50
7.57 5.26
-
234.40 220.55
0.98 0.68
N.A. N.A.
N.A. N.A.
N.A. N.A.
N.A. N.A.
Rp
65,418
150,601
-
7.06
16.26
-
30
2.4
10,000
24,000
1. Values and rents may not be quoted in $ psf in local market practice 2. Land values are expressed as per sq ft per plot ratio 3. Capital values refer to the values of both land and building 4. Values provided are for multi-user warehouse buildings
continued on page 13
12
COLLIERS INTERNATIONAL | REGIONAL RESEARCH
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
EXECUTIVE SUMMARy
Local Market Norm
SINGLE-USER WAREHOUSE
SINGLE-USER WAREHOUSE LAND VALUES, CAPITAL VALUES AND MONTHLY GROSS RENTS1 (CONT'D)
IN LOCAL CURRENCY AS OF MARCH 2010 CITY LOCAL CURRENCY LAND CAPITAL VALUE2 VALUE3 (PSF) (PSF) MONTHLY RENT (PSF) IN US$ AS OF MARCH 2010 LAND VALUE2 (PSF) bASIS OF LAND, CAPITAL VALUES AND MONTHLY GROSS RENTS (LOCAL MARKET NORM) GROSS FLOOR AREA (Sq FT) 24,000 18,000 24,000 18,000
CAPITAL MONTHLY LAND PLOT LAND VALUE3 RENT TENURE RATIO AREA (PSF) (PSF) (YEARS) (Sq FT)
Melbourne East & South East Fringe North West New Delhi NH1 NH8 NH24 East North South West Shanghai Pudong New Area Singapore East Sydney South Southwest West Wellington Ngauranga Petone Seaview NZ$ NZ$ NZ$ 62.71 58.06 25.55 140.28 124.30 110.37 0.85 0.77 0.68 44.51 41.21 18.14 99.57 88.23 78.34 0.60 0.55 0.48 Freehold Freehold Freehold 0.5 0.5 0.5 70,000 100,000 100,000 35,000 50,000 50,000 A$ A$ A$ 74.32 23.23 31.35 157.94 125.42 125.42 1.01 0.79 0.89 68.07 21.28 28.71 144.66 114.87 114.87 0.93 0.72 0.82 Freehold Freehold Freehold 1.2 1.2 1.2 220,000 60,000 430,000 264,000 72,000 516,000 S$ 56.00 138.00 1.28 39.92 98.38 0.91 30+30 2.0 150,000 300,000 CNy 232.00 339.00 3.29 33.99 49.66 0.48 50 0.6 150,000 90,000 Rs Rs Rs Rs Rs Rs Rs 1,100 2,170 7,074 9,400 12,616 13,563 1,300 2,580 4,500 5,538 5,600 4,150 12 15 24 33 20 47 41 24.75 48.83 159.17 211.50 283.86 305.17 29.25 58.05 101.25 124.61 126.00 93.38 0.27 0.34 0.54 0.73 0.44 1.05 0.92 99 99 99 Freehold Freehold Freehold Freehold 0.60 0.60 0.60 0.60 0.60 0.60 0.60 15,000 15,000 15,000 5,000 15,000 10,000 7,000 9,000 9,000 9,000 3,000 9,000 6,000 4,200 A$ A$ A$ A$ 17.18 41.80 15.79 13.23 90.00 190.00 88.25 79.00 0.57 1.08 0.50 0.50 15.74 38.28 14.46 12.12 82.43 174.02 80.83 72.36 0.52 0.99 0.46 0.46 Freehold Freehold Freehold Freehold 0.6 0.6 0.6 0.6 40,000 30,000 40,000 30,000
1. Values and rents may not be quoted in $ psf in local market practice 2. Land values are expressed as per sq ft per plot ratio 3. Capital values refer to the values of both land and building
COLLIERS INTERNATIONAL | REGIONAL RESEARCH
13
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
Local Market Norm
SINGLE-USER FACTORy
SINGLE-USER FACTORY LAND VALUES, CAPITAL VALUES AND MONTHLY GROSS RENTS1
IN LOCAL CURRENCY AS OF MARCH 2010 CITY LOCAL CURRENCY LAND CAPITAL MONTHLY VALUE2 VALUE3 RENT (PSF) (PSF) (PSF) IN US$ AS OF MARCH 2010 LAND VALUE2 (PSF) bASIS OF LAND, CAPITAL VALUES AND MONTHLY GROSS RENTS (LOCAL MARKET NORM) GROSS FLOOR AREA (Sq FT) 429,000 54,600
CAPITAL MONTHLY LAND PLOT LAND VALUE3 RENT TENURE RATIO AREA (PSF) (PSF) (YEARS) (Sq FT)
Beijing Shang Di yi Zhuang Greater Tokyo Chiba - Ichikawa Chiba - Mihama Saitama - Ageo Tokyo - Ota yokohama - Naka Guangzhou GETDD Hong Kong4 Low Quality Mid Range Prime Quality Jakarta Bekasi Karawang Melbourne East & South East Fringe North West New Delhi NH1 NH8 NH24 East North South West Rs Rs Rs Rs Rs Rs Rs 1,100 2,211 7,074 9,819 12,616 13,563 1,300 2,580 4,967 5,538 6,138 5,059 12 15 24 37 20 51 41 24.75 49.75 159.17 220.93 283.86 305.17 29.25 58.05 111.76 124.61 138.11 113.83 0.27 0.34 0.54 0.83 0.45 1.15 0.92 99 99 99 Freehold Freehold Freehold Freehold 1.25 1.25 1.25 1.25 1.25 1.25 1.25 15,000 15,000 15,000 5,000 15,000 10,000 7,000 18,750 18,750 18,750 6,250 18,750 12,500 8,750 A$ A$ A$ A$ 17.18 41.80 15.79 13.23 90.00 190.00 88.25 79.00 0.57 1.08 0.50 0.50 15.74 38.28 14.46 12.12 82.43 174.02 80.83 72.36 0.52 0.99 0.46 0.46 Freehold Freehold Freehold Freehold 0.6 0.6 0.6 0.6 40,000 30,000 40,000 30,000 24,000 18,000 24,000 18,000 Rp Rp 66,069 37,942 187,197 150,601 2,960 7.13 4.10 20.21 16.26 0.32 30 30 2.4 2.4 15,000 70,000 36,000 168,000 HK$ HK$ HK$ 1,191.19 1,564.39 2,472.44 5.37 6.74 8.21 153.41 201.48 318.43 0.69 0.87 1.06 N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. CNy 56.23 286.20 2.55 8.24 41.93 0.37 50 1.5 150,000 225,000 JPy JPy JPy JPy JPy 3,834 2,377 1,826 9,963 4,080 10,684 9,197 8,640 16,815 10,962 41.02 25.44 19.54 106.61 43.66 114.32 98.41 92.45 179.92 117.30 Freehold Freehold Freehold Freehold Freehold 2.00 2.00 2.00 2.00 2.00 215,278 32,292 32,292 16,146 107,634 430,556 64,584 64,584 32,292 215,268 CNy CNy 297.78 51.12 659.85 391.50 6.22 4.24 43.62 7.49 96.66 57.35 0.91 0.62 50 50 1.1 1.3 390,000 42,000
1. Values and rents may not be quoted in $ psf in local market practice 2. Land values are expressed as per sq ft per plot ratio 3. Capital values refer to the values of both land and building 4. Values provided are for multi-user factory buildings
continued on page 15
14
COLLIERS INTERNATIONAL | REGIONAL RESEARCH
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
EXECUTIVE SUMMARy
Local Market Norm
SINGLE-USER FACTORy
SINGLE-USER FACTORY LAND VALUES, CAPITAL VALUES AND MONTHLY GROSS RENTS1 (CONT'D)
IN LOCAL CURRENCY AS OF MARCH 2010 CITY LOCAL CURRENCY IN US$ AS OF MARCH 2010 bASIS OF LAND, CAPITAL VALUES AND MONTHLY GROSS RENTS (LOCAL MARKET NORM) GROSS FLOOR AREA (Sq FT) 150,000 150,000
LAND CAPITAL MONTHLY LAND VALUE2 VALUE3 RENT VALUE2 (PSF) (PSF) (PSF) (PSF)
CAPITAL MONTHLY LAND PLOT LAND VALUE3 RENT TENURE RATIO AREA (PSF) (PSF) (YEARS) (Sq FT)
Shanghai Minhang District Pudong New Area Singapore Central S$ 81.57 145.00 1.35 58.15 103.37 0.96 30 + 30 2.5 100,000 250,000 CNy CNy 95.00 105.00 305.00 324.00 2.12 2.42 13.92 15.38 44.68 47.46 0.31 0.35 50 50 1 1 150,000 150,000
1. Values and rents may not be quoted in $ psf in local market practice 2. Land values are expressed as per sq ft per plot ratio 3. Capital values refer to the values of both land and building
COLLIERS INTERNATIONAL | REGIONAL RESEARCH
15
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
Australia
ECONOMIC INDICATORS FOR MELBOURNE
ECONOMIC INDICATORS
INDICATORS year-on-year GDP Growth year-on-year Manufacturing Output Growth Rate Total Imports Total Exports Container Throughput (TEUs) Air Cargo Throughput (Tonnes)
*n.a. denotes not available
PERIOD October 2009 March 2010 October 2009 March 2010 October 2009 March 2010 October 2009 March 2010 October 2009 March 2010 October 2009 March 2010
DATA 1.6% 1.1% A$30.0 billion A$8.7 billion n.a. n.a.
MELBOURNE
Factory and Warehouse `` The Melbourne industrial market started to stabilise in 2H 2009 as a result of improving economic conditions that fuelled increased demand from tenants, private investors and owner occupiers. `` The pick-up in demand for industrial space helped to moderate the decline in land values, capital values and rents in the review period from October 2009 to March 2010. The decline in rents narrowed from an average of 11.2% in the previous six-month review period, ending September 2009, to 5.6% in the current review period, ending March 2010, while average capital values of industrial properties edged up marginally by 1.0% for the period October 2009 to March 2010 compared to a 5.8% drop in the previous six months. Similarly, land prices were flat versus a 16.3% fall previously. There was a noticeable pick-up in investment sales volume of industrial space in 2009, to 38 transactions, worth a total of
more than A$300 million, up sharply from the A$128 million accumulated in 2008. Sales were dominated by private investors and owner-occupiers. A private investor acquired a 193,967-sq ft warehouse located at Lot 5 Horsburgh Drive, Altona North for A$22 million, while the 120,578-sq ft warehouse at 176 Swann Drive, Derrimut, was sold to a private investor for A$10.5 million. `` Over the past six months, approximately 1.2 million sq ft of industrial space was completed across the Melbourne industrial market, with an estimated 2.1 million sq ft currently under construction. While the Melbourne industrial market is expected to continue its momentum in the next 12 months, the oncoming supply will put a cap on growth in land values, capital values and rents of industrial space.
``
``
16
COLLIERS INTERNATIONAL | REGIONAL RESEARCH
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
EXECUTIVE SUMMARy
AUSTRALIA
Australia
MAJOR TRANSACTIONS IN MELBOURNE
TRANSACTIONS
BUILDING/LAND PLOT 61 Australis Drive, Derrimut 28 Salta Drive, Altona North 10 Stubb Street, Somerton Clayton Business Park, Clayton 786 Stud Road, Scoresby 324 Frankston Dandenong Rd, Dandenong Lot 5 Horsburgh Drive, Altona North 176 Swann Drive, Derrimut 292 Lorimer Street, Port Melbourne PROPERTy TyPE Warehouse Warehouse Warehouse Warehouse Warehouse Warehouse Warehouse Warehouse Warehouse LEASE/SALE Lease Lease Lease Lease Lease Sale Sale Sale Sale TENANT/PURCHASER Brillian Aluminium Fosters Toll Logistics Lifestyle Breakaway Apparel Prime West Private Investor Private Investor Private Investor FLOOR/LAND AREA (SQ FT) 266,947 256,764 236,808 236,808 67,436 312,608 193,967 120,578 44,563
COLLIERS INTERNATIONAL | REGIONAL RESEARCH
17
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
Australia
ECONOMIC INDICATORS FOR SyDNEy
ECONOMIC INDICATORS
INDICATORS year-on-year GDP Growth year-on-year Manufacturing Output Growth Rate Total Imports Total Exports Container Throughput (TEUs) Air Cargo Throughput (Tonnes)
*n.a. denotes not available
PERIOD October 2009 March 2010 October 2009 March 2010 October 2009 March 2010 October 2009 March 2010 October 2009 March 2010 October 2009 March 2010
DATA 2.7% n.a. A$85.1 billion A$78.5 billion 343,236 n.a.
SyDNEy
Factory, Warehouse and High-Specs `` Strong imports and exports have helped stabilise the Sydney industrial market in 1Q 2010. Exports increased by 9.2% month-on-month (MoM) in December 2009, while imports also increased, by 5.2% MoM, in the same period. `` The continuing shortage of development finance, combined with a reduction in pre-commitments for industrial space, has led to the further decline of industrial land prices across Sydney, by an average of 16.1% and 11.2% in Sydney South and West markets, respectively, during the six-month review period between October 2009 and March 2010. In the Southwest market, although demand remained curtailed by the lack of bank financing, the lack of supply has helped to prop up land values, keeping them unchanged from the level six months ago. Rents, on the other hand, have not decreased as much as land values. The main factor that has helped cushion the fall has been the increase in incentives over 2H 2009. The most notable increase was in Sydney's Northern industrial market, which saw incentives increase by up to 10.0% over 2H 2009. Incentives in Sydney's South, South-west and Western markets
only saw a marginal increase of between 2.0% and 5.0% over 2H 2009. `` After a 12-month hiatus, during which all acquisitions of industrial properties were by private investors, private syndicates or owner-occupiers, real estate investment trusts (REITs) returned to the sales scene in December 2009 when Dexus Property Group purchased 2-4 Military Road, Matraville for A$46,100,000 from AMP Capital Investors. The value of land is expected to be close to the bottom, with prelease activity as well as the loosening of lending criteria by the banks, set to slowly increase over the course of 2010. However the tightening of credit and stricter lending criteria from banks to both private and institutional land holders in the past 12 months have resulted in a distinct lack of new developments coming into the market. This is not set to change in the short term and will put pressure on existing supply as economic fundamentals improve and businesses plan for future growth. As such, rents and capital values of warehouses, specifically the large and high quality ones, are forecast to increase over the next 12 months.
``
``
18
COLLIERS INTERNATIONAL | REGIONAL RESEARCH
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
EXECUTIVE SUMMARy
Australia
MAJOR TRANSACTIONS IN SyDNEy
TRANSACTIONS
BUILDING/LAND PLOT Greystanes Industrial Estate, Greystanes 17 Jumal Place, Smithfield Herbert Place, Smithfield 50 Airds Road, Minto 72-74 Jedda Road, Prestons 38 Bourke Road, Alexandria 19 McPherson Street, Banksmeadow 2-4 Military Road, Matraville 96-114 Gow Street, Padstow 11 Amour Street, Milperra 256-280 Coward Street, Mascot PROPERTy TyPE Warehouse Warehouse Warehouse Warehouse Warehouse Warehouse Warehouse Warehouse Warehouse Warehouse Warehouse LEASE/SALE Lease Lease Lease Lease Lease Lease Sale Sale Sale Sale Sale TENANT/PURCHASER Symbion Pharmaceutical Axima Logistics Sumo Distribution Acacia Timber CSR Grace Removals Private Investor Dexus Property Group Private Investor Private Investor Private Investor FLOOR/LAND AREA (SQ FT) 186,216 144,710 128,317 77,500 68,243 31,215 415,164 324,575 279,636 139,597 110,502
COLLIERS INTERNATIONAL | REGIONAL RESEARCH
19
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
China
ECONOMIC INDICATORS FOR BEIJING
ECONOMIC INDICATORS
INDICATORS year-on-year GDP Growth year-on-year Manufacturing Output Growth Rate Total Imports Total Exports Container Throughput (TEUs) Air Cargo Throughput (Tonnes)
*n.a. denotes not available
PERIOD January 2009 December 2009 July 2009 December 2009 July 2009 December 2009 July 2009 December 2009 July 2009 December 2009 July 2009 December 2009
DATA 10.1% 9.1% CNy674.5 billion CNy177.3 billion n.a. 816,198
BEIJING
Factory and Warehouse `` The local economy accelerated, with gross domestic product (GDP) growing at 10.1% in 2009, up 1.1 percentage points year-on-year (YoY). Manufacturing output grew by 9.1% YoY in the six-month period ending December 2009. The recovering global economy boosted the local import and export sector during the period from July to December 2009, with air cargo throughput rising by 23.7% compared to the previous six months. `` The robust economy and manufacturing sector led to active expansions by manufacturers. This boosted the land sales market during the period of review between October 2009 and March 2010. Although domestic companies continue to be the major players in acquiring land lots, increasing interest from foreign investors has been observed in recent months. Large-scale transactions that took place between October 2009 and March 2010 included Beijing Tide Pharmaceutical Co.'s purchase of a 1.3 million-sq ft plot in Beijing Economictechnological Development Area (BDA) and China Eastern Airlines' acquisition of a 1.0 million-sq ft land parcel in Shunyi. Expansions by manufacturers in the pharmaceutical and information technology sectors and logistic operators in Yizhuang and Tongzhou were particularly active. As a result, land values in the above two areas increased to CNY51.12 and CNY57.40 per sq ft, up by 9.2% and 15.0% over the last review period, respectively, while land values in Tianzhu and Shangdi remained stable.
``
Despite improving market conditions, overall leasing demand for the industrial space remained weak and fragile, with Schneider Electric, Amazon and Unilever leasing deals in Tongzhou Logistics Park, among the more notable leasing transactions in the review period. In order to attract tenants and relieve pressure on large vacant space, landlords, especially in the logistics sector, continued to cut rentals. As a result, the average rent for warehouse space in Tianzhu and Tongzhou decreased by 4.2% and 3.2%, while average industrial rent in Shangdi and Yizhuang remained stable. Capital values were also stable, except for a 0.9% increase in Tongzhou's warehouse properties. During the review period, China Resource Logistics and Xianglong Logistics completed the first phase of their warehouse developments in Tongzhou and Daxing, bringing approximately 538,000 sq ft and 236,720 sq ft, respectively, of gross floor area onto the local logistics market. On the other hand, no manufacturing spaces for leasing were completed, as the local government continues to encourage the built-to-suit development model in the manufacturing sector. With the local manufacturing sector back on an accelerating growth path, and more domestic as well as international companies expanding their businesses, demand for industrial space should increase steadily over the next 12 months. However, the overall rents of factory and warehouse space are expected to remain stable in the coming quarters, as the leasing market starts to recover.
``
``
``
``
20
COLLIERS INTERNATIONAL | REGIONAL RESEARCH
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
EXECUTIVE SUMMARy
China
MAJOR TRANSACTIONS IN BEIJING
TRANSACTIONS
BUILDING/LAND PLOT Tongzhou Logistics Park Tongzhou Logistics Park Tongzhou Logistics Park Beijing Economic-technological Development Area Houshayu, Shunyi District Beijing Economic-technological Development Area Jinqiao, Majuqiao Town, Tongzhou District Beijing Economic-technological Development Area PROPERTy TyPE Warehouse Warehouse Warehouse Land Land Land Land Land LEASE/SALE Lease Lease Lease Sale Sale Sale Sale Sale TENANT/PURCHASER Amazon Schneider Electric Unilever Beijing Tide Pharmaceutical China Eastern Airlines Beijing Leadman Biochemistry Beijing Liando Jinqiao Real Estate National Tsing Hua Chuangyigang FLOOR/LAND AREA (SQ FT) 118,360 64,560 32,280 1,315,023 1,001,433 859,627 571,894 565,225
COLLIERS INTERNATIONAL | REGIONAL RESEARCH
21
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
China
ECONOMIC INDICATORS FOR GUANGZHOU
ECONOMIC INDICATORS
INDICATORS year-on-year GDP Growth year-on-year Manufacturing Output Growth Rate Total Imports Total Exports Container Throughput (TEUs) Air Cargo Throughput (Tonnes)
*n.a. denotes not available
PERIOD October 2009 December 2009 October 2009 March 2010 October 2009 February 2010 October 2009 February 2010 October 2009 March 2010 October 2009 March 2010
DATA 11.5% n.a. CNy1,256.3 billion CNy1,194.7 billion 154,887 323,600
GUANGZHOU
Factory and Warehouse `` The increase in export tax rebate for the agriculture processing, electronics, footwear, glass products and iron and steel product manufacturing industries by the State Council helped to shore up industrial production for exports amid the economic downturn. According to information from the Guangzhou Statistical Bureau, there was a rapid growth in industrial production in January and February 2010. Industrial output reached CNY189.0 billion, up 18.8% quarter-on-quarter (QoQ), or an increase of 15.5% compared to the same period in 2009. `` This has provided some boost to demand for industrial properties, particularly by the high technology (electronics, biotechnology, pharmaceuticals and spare parts) and the logistics industries. With limited supply of industrial space in the review period amid an uptick in demand, average rents of warehouses and factories were pressured up by an average of 10.1% and 0.8%, respectively. The capital values of industrial space also trended up by an average of 9.7% during the review period, on the back of improved investor sentiment.
``
The land sales market was fairly active during the six months ending March 2010, with Sino-Foreign Joint Venture Enterprises accounting for nine out of 17 land sales and the rest from domestic enterprises, compared to the previous review period, where domestic enterprises dominated the land sales market. The increase in interest in the land sales market saw land values inching up 2.0% in the six months ended March 2010. Notable land transactions concluded were the Wrigley Confectionery (China) Co. Ltd., Guangzhou Tingyi Beverage Co. Ltd. and the Guangzhou Baiyun Electric Equipment Co. Ltd., which acquired 1,480,687 sq ft, 556,899 sq ft and 268,980 sq ft of land, respectively, in Luogang and Baiyun Districts. Along with the improvements in the global economy and exports, the industrial sector in Guangzhou and, hence, demand for industrial space, is expected to pick up. Average land and capital values and rents of industrial properties are forecast to nudge up by 3.3%, 1.8% and 3.4%, respectively, over the next 12 months.
``
MAJOR TRANSACTIONS IN GUANGZHOU
TRANSACTIONS
BUILDING/LAND PLOT Development Zone, Luogang Luogang Development Zone, Luogang Baiyun Development Zone, Luogang PROPERTy TyPE Land Land Land Land Land LEASE/SALE Sale Sale Sale Sale Sale TENANT/PURCHASER Wrigley Confectionery (China) Co. Ltd. Guangzhou Tingyi Beverage Co. Ltd. De-hao Electronics Technology Ltd. Guangzhou Baiyun Electric Equipment Co. Ltd. MARUBI Biotechnology Co. Ltd. FLOOR/LAND AREA (SQ FT) 1,480,687 556,899 375,264 268,980 223,590
22
COLLIERS INTERNATIONAL | REGIONAL RESEARCH
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
EXECUTIVE SUMMARy
China
ECONOMIC INDICATORS FOR SHANGHAI
ECONOMIC INDICATORS
INDICATORS year-on-year GDP Growth year-on-year Manufacturing Output Growth Rate Total Imports Total Exports Container Throughput (TEUs) Air Cargo Throughput (Tonnes) PERIOD October 2009 December 2009 August 2009 January 2010 August 2009 January 2010 August 2009 January 2010 August 2009 January 2010 August 2009 January 2010 DATA 11.2% 12.2% CNy5,317.8 billion CNy5,486.4 billion 13.4 million 1.7 million
SHANGHAI
Factory and Warehouse `` Shanghai's industrial property market recovered gradually on the back of a revival in domestic and external demand. This is evidenced by the 12.2% YoY growth in industrial output from August 2009 to January 2010, in contrast to an 11.0% YoY decline from February to July 2009. The rebound in exports also resulted in a marked increase in container throughput, to 13 million twenty-foot equivalent units (TEUs), up 12.7% YoY during August 2009 to January 2010. `` Along with the improvement in industrial production and the external economy, demand for industrial property rebounded gradually. In particular, demand for warehouses from companies in retail distribution, fast moving consumer goods and e-commerce picked up considerably. Consequently, rents of industrial property bottomed and registered a 2.0% increase on average across the submarkets surveyed during the period of review, while capital values and land auction prices held steady during the review period.
``
The completion of new industrial properties during the period of review rose by around 33%, to 1.3 million sq ft, compared with the previous report period. Major transactions during the review period included 360buy's purchase of a 1.4 million-sq ft land lot in Jiading Industrial Zone. Meanwhile, Morgan Rolling Mill (Shanghai) Co., Ltd and ASUSTek Computer Inc. purchased a 243,865-sq ft and a 165,363-sq ft land lot, respectively, in Xinzhuang Industrial Zone. On the lease front, Faurecia leased a 136,348-sq ft factory in Anting Town, Jiading. Shanghai's manufacturing industry is expected to recover strongly in 2010, which will render support to the recovery of the industrial property market. Thus, the rentals are foreseen to rise steadily, by around 4% over the next 12 months. However, capital values of industrial space are expected to remain stable due to increase in new supply.
``
``
MAJOR TRANSACTIONS IN SHANGHAI
TRANSACTIONS
BUILDING/LAND PLOT No. 1099 yuangong Rd, Anting Town, Jiading No.111, Dongbao Road, Malu Town, Jiading Industrial Zone, Jiading Plot 98, Xinzhuang Industrial Zone, Minhang Plot 68, Xinzhuang Industrial Zone, Minhang PROPERTy TyPE Factory Land Land Land LEASE/SALE Lease Sale Sale Sale TENANT/PURCHASER Faurecia 360buy Morgan Rolling Mill (Shanghai) Co., Ltd ASUSTeK Computer Inc. FLOOR/LAND AREA (SQ FT) 136,348 1,435,194 243,865 165,363
COLLIERS INTERNATIONAL | REGIONAL RESEARCH
23
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
Hong Kong SAR
ECONOMIC INDICATORS FOR HONG KONG SAR
ECONOMIC INDICATORS
INDICATORS year-on-year GDP Growth year-on-year Manufacturing Output Growth Rate Total Imports Total Exports Container Throughput (TEUs) Air Cargo Throughput (Tonnes) PERIOD July 2009 December 2009 September 2009 February 2010 September 2009 February 2010 September 2009 February 2010 September 2009 February 2010 September 2009 February 2010 DATA 0.2% -14.8% HK$1,482.0 billion HK$1,330.0 billion 10.9 million 1.9 million
HONG KONG SAR
Factory `` Thanks to the continued recovery of the external trading environment, in particular the sharp increase in intra-regional trade volume, the local industrial property market showed distinct signs of recovery during 1Q 2010. In the case of reexports, total value picked up additional momentum during the quarter, with the pace of growth accelerating from 1.9% YoY in November 2009 to 29.1% YoY in February 2010. `` Demand growth has yet to be witnessed across the board for the industrial market, as the overall volume of external trade has yet to return to the pre-crisis level seen in 1H 2008, despite the encouraging pace of growth registered in the past few months. However, the overall industrial market enjoyed spillover demand from the traditional office sector, which has started to experience rental growth. The average rents for factories bottomed in August 2009 and, during the six-month period ended in March 2010, average factory rents increased 6.8%, to HK$6.78 per sq ft per month. Some industrial occupiers, including companies engaged in logistics and wholesale/distribution, were actively searching for real estate options to consolidate their operations under one roof during 1Q 2010. The investment demand for industrial premises remained keen. During the period from September to November 2009, the number of strata-titled transactions increased 20.0% QoQ to 1,753. However the number of transactions contracted 17.7% QoQ, to 1,442, during the period from December 2009 to February 2010, as most landlords held on tightly to their premises, hoping to enjoy further capital appreciation. On the price front, the average price of factory premises increased 12.3% during the six-month period ended March 2010, to HK$1,743 per sq ft. Major transactions registered during 1Q 2010 included the acquisition of the whole block of Fanling Distribution Centre in Fanling by Huge Max (Hong Kong) Ltd from Goodman ``
Asia in December 2009 for a total consideration of HK$150 million, or an average unit price of HK$1,089 per sq ft based on a total floor area of 137,700 sq ft. In November 2009, a party related to Toyomall acquired the whole block of Yeu Shing Industrial Building in Tuen Mun for a total consideration of HK$190 million. Based on a total floor area of about 270,000 sq ft, the average unit price was HK$704 per sq ft. Looking ahead, the industrial property market is expected to stage further growth amid the continued recovery of the external trading environment and the corresponding occupational demand growth. Additionally, the introduction of new measures to facilitate the redevelopment and wholesale conversion of industrial buildings on 1st April 2010 by the Government is expected to give a boost to investment demand for whole-block industrial premises. Prime industrial premises in traditional industrial core areas are expected to be the key beneficiaries. The rental and capital values of factory premises are expected to increase by 8.0% and 15.0%, respectively, over the next 12 months.
``
Warehouse `` Cargo throughput volume resumed positive growth amid the continued recovery of Hong Kong external trade performance. During the three-month period ending February 2010, air cargo throughput increased 36.4% YoY, to 888,000 tonnes, accelerating from the growth of 4.2% YoY in the preceding three-month period. Despite having bottomed in 2H 2009, the cargo throughput volume has yet to return to pre-crisis levels. Meanwhile, the container throughput volume increased 13.8% YoY, to 5.4 million TEUs, during the period from December 2009 to February 2010, compared to a fall of 11.9% YoY in the preceding three-month period. `` During the period from October 2009 to March 2010, the average rents for cargo lift access warehouses increased 3.6%, to HK$5.26 per sq ft per month, while that of ramp access
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24
COLLIERS INTERNATIONAL | REGIONAL RESEARCH
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
EXECUTIVE SUMMARy
Hong Kong SAR
warehouses increased 2.1%, to HK$7.57 per sq ft per month. Similar to the factory sector, the demand from prospective buyers continued to underpin the price performance of warehouses. The capital values of cargo lift access warehouse and ramp access warehouse increased 10.5% and 10.3%, respectively, between October 2009 and March 2010. `` Depending on the availability of physical provisions such as ramp access, rentals are anticipated to increase 5.0% to 6.0%, while capital values are expected to increase 13.0% to 15.0% over the next 12 months. buildings (I-O) received positive spillover demand from an increase in rentals in the office market. `` The average I-O rent bottomed in August 2009. During the six-month period ended in March 2010, the average I-O rent increased 6.3%, to HK$13.50 per sq ft per month, compared with the drop of 8.6% recorded in the preceding six-month period. Amid the continued recovery of external trading environment and the corresponding occupational demand growth, I-O rentals are expected to increase 12.0% over the next 12 months.
``
High-Specs Industrial Building `` Similar to the factory sector, the high-specs Industrial-Office MAJOR TRANSACTIONS IN HONG KONG SAR
TRANSACTIONS
BUILDING/LAND PLOT Riley House Hutchison Logistics Centre yeu Shing Industrial Building Fanling Distribution Centre PROPERTy TyPE Factory Warehouse Factory Warehouse LEASE/SALE Lease Lease Sale Sale TENANT/PURCHASER Consumer Testing Laboratories Wah Tak Logistics Ltd Local investor Huge Max (Hong Kong) Ltd FLOOR/LAND AREA (SQ FT) 19,519 23,715 270,000 137,700
COLLIERS INTERNATIONAL | REGIONAL RESEARCH
25
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
India
ECONOMIC INDICATORS FOR INDIA
ECONOMIC INDICATORS
INDICATORS year-on-year GDP Growth year-on-year Manufacturing Output Growth Rate Total Imports Total Exports Container Throughput (TEUs) Air Cargo Throughput (Tonnes)
*n.a. denotes not available
PERIOD July 2009 December 2009 July 2009 December 2009 August 2009 July 2010 August 2009 July 2010 April 2009 February 2010 October 2009 March 2010
DATA 7.2% 9.2% Rs 659.1 billion Rs 387.5 billion 509.0 million n.a.
NEW DELHI
Factory and Warehouse `` In March 2010, the Delhi Government approved the Delhi Industrial Development Operation and Maintenance Bill. The policy identified education, fashion designing, financial services and information technology (IT) as relevant industries and will plan for separate high technology hubs for these service industries. In addition, a specific emphasis on the development of the Delhi-Mumbai industrial corridor was provided in Budget 2010. This Delhi-Mumbai dedicated corridor, of an overall length of 1,483km, will offer highspeed connectivity for high axle load wagons (25-tonne) of double-stacked container trains, supported by high power locomotives. Together, these initiatives could better direct industrial developments in Delhi and boost industrial growth in the medium to long run. `` Meanwhile, the economic and monetary stimulus provided by the India Government following the onset of the global financial crisis has helped to catapult industrial growth during the review period. This has helped lift tenant demand for industrial properties and nudged rents up by an average of 3.3% to 11.6% over the previous review period. MAJOR TRANSACTIONS IN NEW DELHI
``
After almost a year of lacklustre performance, sales activity in the NCR region regained momentum and the industrial land rate and capital values witnessed an average increase of approximately 0.5% to 8.3% in the current review period. Limited land availability in Delhi continued to support increase in land and capital values in the range of 0.7% to 3.2%. Despite a significant increase in the number of enquiries for industrial space, transactions concluded in the period under review were small in size, such as Goyal Tin & General Industries and Mahaveer Steels Industries Ltd leasing 16,000 sq ft and 10,000 sq ft at Okhla II and Naraina Phase I, respectively. Looking ahead, land and capital values and rents of industrial properties are expected to witness marginal appreciation of up to 3% in the next 12 months due to improved market sentiment and increased activity in the market.
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TRANSACTIONS
BUILDING/LAND PLOT Okhla - II Naraina Phase - I Udyog Nagar Mohan Cooperative Okhla - II PROPERTy TyPE Factory Factory Factory Warehouse Warehouse LEASE/SALE Lease Lease Lease Lease Lease TENANT/PURCHASER Goyal Tin & General Industries Mahaveer Steels Industries Ltd Jagrati Pharmaceuticals Gati Couriers Pvt Ltd N.S. Transport Services FLOOR/LAND AREA (SQ FT) 16,000 10,000 7,000 14,000 12,000
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COLLIERS INTERNATIONAL | REGIONAL RESEARCH
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
EXECUTIVE SUMMARy
Indonesia
ECONOMIC INDICATORS FOR JAKARTA
ECONOMIC INDICATORS
INDICATORS year-on-year GDP Growth year-on-year Manufacturing Output Growth Rate Total Imports Total Exports Container Throughput (TEUs) Air Cargo Throughput (Tonnes)
*n.a. denotes not available
PERIOD January 2009 December 2009 January 2009 December 2009 October 2009 March 2010 October 2009 March 2010 January 2009 December 2009 October 2009 March 2010
DATA 4.5% 2.1% Rp 450.2 trillion Rp 365.2 trillion 3.8 million n.a.
JAKARTA
Factory and Warehouse `` The Indonesia government is reviewing its investment rules and plans to deregulate the property industry by end-1H 2010, allowing foreigners to buy homes and commercial real estate directly. The government also plans to double its spending on roads, seaports and airports, to Rp1,442.3 trillion over the next five years, as the country aims to deliver average economic growth of 6.6% by 2014. This should encourage more foreign investment in Indonesia in the medium term. `` Meanwhile, during the period of review, investor confidence was lifted by a better than expected economic performance for 2009. Although the Indonesian economy expanded by a slower 4.5% YoY in 2009, compared to the 6.0% YoY growth registered in 2008, and manufacturing output also slowed in 2009, to 2.1% YoY from the 3.6% YoY growth experienced in 2008, the impact of the global financial crisis on the Indonesian economy was, nevertheless, milder than expected. Underpinned by improved investor sentiment, sales of industrial land during 2009 surpassed expectations. Land transactions during the October 2009 to March 2010 period were again dominated by automotive-related industries, in particular those producing spare parts for cars or motorcycles. Mitsuba, an automotive parts manufacturer from Japan, whose manufacturing plant currently sits on a four-hectare land site, acquired a 786,000-sq ft parcel of land in Modern Cikande to build another manufacturing plant, which is likely to be completed by 2010. Other industries that were quite active in purchasing land from the Government were the logistics
providers, pharmaceutical, food, steel, chemical and printing industries. `` Continued inquiries for industrial land pressured up the asking prices of several industrial estates, particularly in Bekasi, Karawang and Serang, by between 5.0% and 10.0% in 2010. Thus, in the period under review, industrial land prices edged up by an average of 1.9%. In the local market, industrial rents, which are usually quoted in U.S. dollars, were stable in the period under review but slid 4.5% in local currency terms with the strengthening of Rupiah against the U.S. dollar. On the supply front, no new industrial estates will be opened for sale in the next 12 months. Hence, new land will be available only from existing estates with undeveloped land stock, although any new expansion is expected to be limited as estate owners are likely to focus on selling their remaining stock. Prospects for Indonesia's industrial property market look rosy, boosted by an expected rise in foreign investments as a result of the government's recent investment-friendly policies, political stability relative to Thailand, huge domestic market, favourable ratings by rating agencies such as Moody's, S&P and Fitch, as well as the forecast acceleration in economic growth to between 5.0% and 5.5% for 2010. Hence, land, capital and rental values could increase by up to 7% in the next 12 months.
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COLLIERS INTERNATIONAL | REGIONAL RESEARCH
27
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
Indonesia
MAJOR TRANSACTIONS IN JAKARTA
TRANSACTIONS
BUILDING/LAND PLOT Modern Cikande Karawang Industrial International City Modern Cikande Bekasi Fajar Industrial Estate MM2100 Krakatau Industrial Estate Cilegon Bekasi Fajar Industrial Estate Modern Cikande Suryacipta Indotaisei Bekasi Fajar Industrial Estate PROPERTy TyPE Land Land Land Land Land Land Land Land Land Land Land LEASE/SALE Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale TENANT/PURCHASER Mitsuba (Japanese automotive parts manufacturer) Automotive & motorcycles parts company Taiwanese genuine leather tannery company PT. Kayaba Indonesia (automotive parts) PT. Komatsu Indonesia Company from steel related industry PT. Oh Sung E.I. Local aluminum company PT. East Hope Agriculture Indonesia Pharmaceutical company PT. yasunli A.U.P. (plastic molding) FLOOR/LAND AREA (SQ FT) 785,765 538,195 527,431 430,556 322,917 322,917 279,861 269,098 258,334 258,334 215,278
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COLLIERS INTERNATIONAL | REGIONAL RESEARCH
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
EXECUTIVE SUMMARy
Japan
ECONOMIC INDICATORS FOR GREATER TOKyO
ECONOMIC INDICATORS
INDICATORS year-on-year GDP Growth year-on-year Manufacturing Output Growth Rate Total Imports Total Exports Container Throughput (TEUs) Air Cargo Throughput (Tonnes) PERIOD July 2009 December 2009 July 2009 December 2009 July 2009 December 2009 July 2009 December 2009 July 2009 December 2009 July 2009 December 2009 DATA -2.9% 5.2% JPy12,125.7 billion JPy11,056.6 billion 3.4 million 1.0 million
GREATER TOKyO
Factory and Warehouse `` Japan's economy continued on its recovery path, with real GDP expanding by 0.9% on a QoQ basis, or 3.8% on an annualised basis in 4Q 2009, as exports and industrial production resumed their upward trend on the back of improvement in global economic growth. Domestic consumption is also slowly turning around, underpinned by the improving job market, as evidenced by the easing of unemployment rate from an all-time high of 5.7% in July 2009, to 4.9% in January 2010. Business fixed investments, however, are likely to stay subdued for the time being, despite an improvement in corporate profits. `` As economic recovery is happening at a slow pace, demand for industrial properties remained lacklustre. As such, land, capital and rental values continued to trend downward in the period under review, notwithstanding the rate of decline having slowed to average around 1.2% for land value and 2.8% for capital value, compared to 2.3% and 6.6%, respectively, in the previous six months. Rents fell 5.1% in the period of review, similar to the 5.0% fall in the previous review period. In a sign of mending investor confidence, institution funds are making a comeback into the Japanese industrial investment
market. In December 2009, Mapletree Investments Pte Ltd (MI), the sponsor for Mapletree Logistics Trust (MLT), formed a joint venture with Itochu Co., a major Japanese trading company, to develop built-to-suit logistics properties in Japan. In February 2010, MLT completed its acquisition of a fourstorey logistics property with a gross floor area of 342,873 sq ft, located in Kashiwa, Chiba, for JPY4.4 billion, while another fund, Industrial & Infrastructure Fund Investment Co. (IIF), a JREIT, acquired leasehold interests in the lands on which IIF Tozuka Techonology Center in Yokohama and IIF Narashino Logistic Center in Chiba stands, for JPY4.5 billion and JPY1.2 billion, respectively. At the same time, IIF sold IIF Fuanabashi Logistic Center, a four-storey industrial building with a GFA of 453,981 sq ft, to Dream Logistics Fund for JPY9.0 billion. `` While the Japanese economy is expected to continue to recover, much hinges on the performances of the United States and European Union, which is forecast to be moderate, according to the World Bank. Capital value of warehouses will therefore likely remain soft, easing by an expected 2% in the next 12 months, while land and rental values may hold steady in the same period.
``
MAJOR TRANSACTIONS IN GREATER TOKyO
TRANSACTIONS
BUILDING/LAND PLOT IIF Tozuka Technology Center IIF Narashino Logistics Center IIF Funabashi Logistic Center Kashiwa Center PROPERTy TyPE Leased Land Leased Land Warehouse Warehouse LEASE/SALE Sale Sale Sale Sale TENANT/PURCHASER IIF Investment Co. IIF Investment Co. Dream Logistics Fund Mapletree Logistics Trust FLOOR/LAND AREA (SQ FT) 338,439 213,499 453,981 342,873
COLLIERS INTERNATIONAL | REGIONAL RESEARCH
29
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
New Zealand
ECONOMIC INDICATORS FOR NEW ZEALAND
ECONOMIC INDICATORS
INDICATORS year-on-year GDP Growth year-on-year Manufacturing Output Growth Rate Total Imports Total Exports Container Throughput (TEUs) Air Cargo Throughput (Tonnes) PERIOD July 2009 December 2009 October 2009 December 2009 September 2009 February 2010 September 2009 February 2010 September 2009 February 2010 September 2009 February 2010 DATA -0.4% -9.9% NZ$18.5 billion NZ$17.9 billion 13.5 million 53,842
AUCKLAND
Office / Warehouse `` The New Zealand economy appears on track for recovery, although a bumpy and subdued one, as evidenced by the 0.4% YoY growth in GDP for the six months ended December 2009 and the 1.9% YoY contraction in manufacturing output for 3Q 2009. `` On the back of the modest improvement in New Zealand's economy and six consecutive months of expansion in manufacturing activity, the industrial property engine is running again and beginning to see some positive activity after stalling in late 2007. In particular, there are glimmers of development activity and proactive equity investment. The pick-up in development activity can be attributed to a pick-up in pre-commitment, since speculative development is virtually non-existent and developers are requiring precommitment from tenants before starting a development project. For example, a design-build development at the M20 Business Park, which will incorporate a purpose-built warehouse and office facility for the technology products and services provider has commenced construction after Ingram Micro (NZ) Limited pre-committed to it. More new developments are underway at M20 Business Park and Highbrook, which are scheduled for completion in the middle of this year after receiving pre-commitments. On the investment sales front, transactions involving properties worth over NZ$2 million has seen a rebound in volume in 2009
over 2008's volume. The sales transactions that have occurred in the Auckland industrial market have arisen through groups of private investors and high net worth individuals joining together to acquire larger industrial assets, while institutional investors are still largely absent. Nevertheless, one of the most significant transactions in the review period has been the ING Property Trust sale of 7-9 Niall Burgess Drive in Mount Wellington for NZ$22 million to Property for Industry. `` Improving demand for industrial properties on the back of the recovering economy has helped to stabilise capitalisation rates for industrial facilities in recent months, with firming land, capital and rental values observed for some submarkets. For example, the average land, capital and rental values of industrial space in the Auckland submarket rose 8.0%, 4.1% and 2.1%, respectively, during the six-month review period. Looking forward, an improvement in the Auckland industrial market is expected as foreshadowed by Colliers International's December 2009 investor confidence survey, which shows that 12% of Auckland industrial investors were pessimistic in December 2009, a stark improvement from 62% pessimistic when the survey was conducted in March 2009. Land values which are stabilising after experiencing declines over the last two years could see an average increase of 2.5%, while rents and capital values of industrial space could increase by up to 3.4% in the next 12 months.
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COLLIERS INTERNATIONAL | REGIONAL RESEARCH
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
EXECUTIVE SUMMARy
New Zealand
MAJOR TRANSACTIONS IN AUCKLAND
TRANSACTIONS
BUILDING/LAND PLOT 5 Unity Drive 9 Pacific Rise 9 Freight Place 7-9 Niall Burgess Drive 10-12 Autumn Place 300 Church Street 182-190 Wairau Road 1 Turin Place 65F Crooks Road PROPERTy TyPE Office/Warehouse Office/Showroom/ Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse LEASE/SALE Lease Lease Lease Sale Sale Sale Sale Sale Sale TENANT/PURCHASER Sealegs International Mercedes-Benz New Zealand Air New Zealand Limited Property For Industry Plastics Manufacturer Relocating Furniture Company Private Investor Chambert Holdings Limited Private Investor FLOOR/LAND AREA (SQ FT) 33,369 24,564 22,605 253,660 56,878 51,238 36,314 30,540 12,809
COLLIERS INTERNATIONAL | REGIONAL RESEARCH
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ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
New Zealand
WELLINGTON
Office / Warehouse `` Cautiously positive economic sentiment, combined with a business and consumer confidence rebound in recent months, has seen tenant demand stabilising in the Wellington industrial market. `` This led to rental declines slowing down to 0.7% in the review period, compared to a 2.7% drop in the previous six months. Landlords are still offering a range of rental incentives, with straightforward rental reductions being the norm. These incentives, though, are more prevalent in the secondary market, or for warehouses larger than 32,000 sq ft. In the review period, well-leased properties have been selling at yields between 7.5% and 8.0%. In general, investment yields have firmed or stayed the same in the Wellington market, compared to the last review period. On the whole, the total value of sales transactions completed in 2009 is lower than 2008 by an estimated NZ$32.69 million. MAJOR TRANSACTIONS IN WELLINGTON
One of the larger investment deals in the review period was the sale of a 204,521-sq ft industrial space at 25 Peterkin Street in Wingate to a private investor for NZ$7.6 million. `` Property for Industry is currently developing a 1.4-ha land parcel in stages at Seaview. Stage One amounting to 18,557 sq ft has been built and is leased to Bridgestone amongst other tenants. The balance of the development will proceed in response to tenant demand, in a range of sizes from 5,150 sq ft to about 59,200 sq ft. According to Colliers International's December 2009 investor confidence survey, confidence among Wellington investors has picked up, improving from 65% pessimistic six months ago to 11% pessimistic in December 2009, indicating that they are expecting the industrial market to stabilise in the next 12 months. Capital values are expected to remain stable on the back of stabilising rents, while land values will continue to fall.
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TRANSACTIONS
BUILDING/LAND PLOT 14 Tyers Road 10 Te Puni Street 25 Peterkin Street 69 The Esplanade 2 Jarden Mile PROPERTy TyPE Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse LEASE/SALE Lease Lease Sale Sale Sale TENANT/PURCHASER ACM NZ Geon Wellington Limited Private Investor Private Investor Marinoto Properties FLOOR/LAND AREA (SQ FT) 28,525 11,206 204,521 12,164 11,841
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COLLIERS INTERNATIONAL | REGIONAL RESEARCH
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
EXECUTIVE SUMMARy
Singapore
ECONOMIC INDICATORS FOR SINGAPORE
ECONOMIC INDICATORS
INDICATORS year-on-year GDP Growth year-on-year Manufacturing Output Growth Rate Total Imports Total Exports Container Throughput (TEUs) Air Cargo Throughput (Tonnes) PERIOD July 2009 December 2009 July 2009 December 2009 July 2009 December 2009 July 2009 December 2009 October 2009 March 2010 October 2009 March 2010 DATA 2.3% 5.0% S$191.9 billion S$212.3 billion 11.4 million 728,308
SINGAPORE
Factory and Warehouse `` As part of the measures to enhance land productivity for landscarce Singapore, the Government announced in the Budget statement 2010 that the existing Industrial Building Allowance (IBA) will be replaced by the Land Intensification Allowance (LIA). The LIA will apply to nine sectors that are identified to be land-intensive: the pharmaceutical, petrochemical, petroleum, chemical, semiconductor, aerospace, marine & offshore, as well as solar cell manufacturing and other specialty industries. Incentives will be given to companies in these nine sectors to intensify their land use. `` The industrial market turned around in 4Q 2009 and continued to firm in 1Q 2010, as businesses start to make plans for expansions. Rents and capital values of factories and warehouses increased by an average of 5.3% and 4.9%, respectively, from the previous review period. Major completions in the period under review include the 1.1 million-sq ft plant by Renewable Energy Corporation at Tuas South Avenue 14 and 0.7 million sq ft C&P Logistics Hub 3 at Penjuru Lane. Acquisitions by REITs gained momentum in the period under review. Ascendas REIT picked up the 212,092-sq ft 31 Joo Koon Circle for S$15 million in February 2010, while Mapletree Logistics Trust bought Soon Hock Logistics Building and 15 Changi South Street 2 for a combined S$77.5 million in November 2009. The industrial investment market was also boosted by the impending listing of Cache Logistic Trust, Asia's first logistics-focused trust in April 2010. This is the first real estate investment trust to list after the outbreak of the global financial crisis. Cache's initial portfolio of properties includes CWT Commodity Hub, Schenker Megahub, C&P Changi Districentre, CWT Cold Hub, Hi-Speed Logistics Centre and C&P Changi Districentre 2, costing a total of S$713.2 million.
``
Following Singapore's exceptionally strong preliminary growth estimate of 13.1% YoY for GDP and 30.0% YoY for the manufacturing sector for 1Q 2010, the official growth forecast for 2010 has been revised upwards, to between 7.0% and 9.0%, from 4.5% to 6.5% previously. The recovery in the exports and manufacturing sector should see an expansion in demand from manufacturers. Together with institutional funds returning to the industrial market, land values, rents and capital values of factories and warehouses could increase up to 10% in the next 12 months.
High-Specs Industrial Building `` The office property market is bottoming and the firming of office rents has slowed the filtering out of demand from highspecs industrial premises to office space. This has helped to stabilise occupancy rates of the high-specs industrial market. `` Hence, whilst rents for high-specs space continued to ease during the period of review, the pace of decline has slowed to 5.1% compared to the 14.1% fall recorded for the previous six months from March 2009 to September 2009. Renewals and consolidation of operations were the key themes for high-specs space from October 2009 to March 2010. Examples of companies renewing their lease or consolidating their operations in the review period include Honeywell (Singapore) Pte Ltd and Johnson Controls Holding (S) Pte Ltd. Besides acquiring 31 Joo Koon Circle, Ascendas REIT also bought DBS Asia Hub, a built-to-suit high-specs space for DBS Bank for S$116 million in February 2010. The bottoming of the office market and the resumption in economic growth will provide support for the high-specs market in the next 12 months. Rents of high-specs space are expected to bottom and remain stable.
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COLLIERS INTERNATIONAL | REGIONAL RESEARCH
33
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
Singapore
MAJOR TRANSACTIONS IN SINGAPORE
TRANSACTIONS
BUILDING/LAND PLOT 16 Kung Chong Road 33 Kranji Link Honeywell Building Platinum 28 Platinum 28 Pioneer Road North/Soon Lee Road 29 Tai Seng Avenue 31 Joo Koon Circle Kallang Avenue Industrial Centre CWT Commodity Hub Soon Hock Logistics Building Schenker Megahub C&P Changi Districentre CWT Cold Hub Hi-Speed Logistics Centre Kallang Bahru Complex 15 Changi South Street 2 C&P Changi Districentre 2 DBS Asia Hub PROPERTy TyPE Factory Factory High-Specs High-Specs High-Specs Land Factory Factory Factory Warehouse Warehouse Warehouse Warehouse Warehouse Warehouse Warehouse Warehouse Warehouse High-Specs LEASE/SALE Lease Lease Lease Lease Lease Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale TENANT/PURCHASER Premium Automobiles Pte Ltd Kosin Structure Pte Ltd Honeywell (Singapore) Pte Ltd Johnson Controls Holding (S) Pte Ltd Aimer (Singapore) Pte Ltd KNG Realty Pte Ltd Emirates Tarian Capital (S) Pte Ltd Ascendas REIT Chiu Teng @ Kallang Pte Ltd Cache Logistics Trust Mapletree Logistics Trust Cache Logistics Trust Cache Logistics Trust Cache Logistics Trust Cache Logistics Trust Chiu Teng @ Kallang Pte Ltd Mapletree Logistics Trust Cache Logistics Trust Ascendas REIT FLOOR/LAND AREA (SQ FT) 25,000 9,792 68,613 11,539 6,318 408,141 212,049 212,092 146,614 2,295,994 444,043 439,956 364,278 341,944 308,626 266,057 249,464 105,945 417,037
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COLLIERS INTERNATIONAL | REGIONAL RESEARCH
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
EXECUTIVE SUMMARy
Taiwan
ECONOMIC INDICATORS FOR TAIWAN
ECONOMIC INDICATORS
INDICATORS year-on-year GDP Growth year-on-year Manufacturing Output Growth Rate Total Imports Total Exports Container Throughput (TEUs) Air Cargo Throughput (Tonnes) PERIOD July 2009 December 2009 July 2009 December 2009 October 2009 March 2010 October 2009 March 2010 September 2009 February 2009 September 2009 February 2009 DATA 4.1% -15.9% NT$3,490.9 billion NT$3,871.1 billion 6.1 million 866,365
TAIWAN
High-Specs Industrial Building `` With the global economy recovery underway, the overall exports and manufacturing growth for Taiwan have improved since 2H 2009. Exports from October 2009 to March 2010 grew 17.8%, while the manufacturing output growth rate has risen from -4.7% in 3Q 2009 to 26.0% YoY in 4Q 2009. `` However, the improving economy has yet to translate to demand for high-specs space, which stayed anaemic during the period of review. Against a continued inflow of new supply, amounting to some 300,000 sq ft in the same period, the vacancy rate in Neihu Technology Park inched up by another percentage point, to 19.6% as of March 2010. As a result, rentals eased 0.6% from NT$31.23 per sq ft per month in September 2009, to NT$31.06 per sq ft per month in March 2010. Underpinned by high liquidity in the market, the investment sales market for high-specs developments was buoyant, with a total of NT$26.0 billion transacted in the six months ending
March 2010. Owner-occupiers and investors were purchasing in anticipation of future capital appreciation and incomegenerating properties, with stable lease contracts favoured. Life insurers were active too, buoyed by the relaxation of investment restrictions for insurance companies. High-specs industrial buildings acquired by life insurance companies in the past six months include Asia Plaza and Taiwan Life Rui Guang Building, which were acquired by Shin Kong Life Insurance for NT$11.5 billion and NT$3.0 billion, respectively. In a short span of one year, Shin Kong Life Insurance has bought three high-specs buildings for NT$15.6 billion, while Cathay Life Insurance has purchased three high-specs buildings for NT$5.8 billion. `` The excess supply of high-specs space will take some time to be absorbed and vacancy rate is thus expected to stay high. Consequently, rents are foreseen to remain soft over the next 12 months.
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COLLIERS INTERNATIONAL | REGIONAL RESEARCH
35
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
Taiwan
MAJOR TRANSACTIONS IN TAIPEI
TRANSACTIONS
BUILDING/LAND PLOT Tai Hsing Building Daan Kong yen Building Asia Plaza Taiwan Life Rui Guang Building Guangyuan Building Jiuzong Road's industrial office TAINET Communication Building E-Park Building Li yuan, Hong Ding and Teng Fu Technology Building Huaku Rui Guang Building PROPERTy TyPE High-Specs High-Specs High-Specs High-Specs High-Specs High-Specs High-Specs High-Specs High-Specs High specs LEASE/SALE Lease Lease Sale Sale Sale Sale Sale Sale Sale Sale TENANT/PURCHASER Wincor Nixdorf Taiwan Ltd. ADDIDAS Shin Kong Life Insurance Shin Kong Life Insurance Cathay Life Insurance Cameo Communications, Inc.'s Cathay Life Insurance China Life Insurance Light Era Development Co., Ltd A foreign institution FLOOR/LAND AREA (SQ FT) 13,272 21,348 1,237,721 299,275 196,195 187,558 99,265 46,178 undisclosed undisclosed
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COLLIERS INTERNATIONAL | REGIONAL RESEARCH
ASIA PACIFIC INDUSTRIAL MARKET OVERVIEW | MAY | 2010
EXECUTIVE SUMMARy
Definitions and Terminology
1. MULTI-NATIONAL CORPORATION (MNCs) A multi-national corporation is defined as a large company that has operations in multiple nations and that requires industrial space. 2. FACTORy Unless otherwise stated, this refers to single-user industrial space catering to MNCs for production / manufacturing purpose. 3. WAREHOUSE Unless otherwise stated, this refers to single-user industrial space catering to MNCs with warehousing requirements as well as their business as third party logistics, distribution and warehousing. 4. HIGH-SPECIFICATIONS (HIGH-SPECS) INDUSTRIAL SPACE This refers to multi-user industrial premises catering to MNCs with floor areas of about 10,000 sq ft, fitted with higher than normal specifications and offering hybrid office-industrial characteristics. This type of space is suitable for high value-added, technology-based manufacturing, information technology, product development, and research and development. 5. LAND Land refers to vacant prepared land with roads, drainage, electricity supply, water supply, telephone service and sewerage. The land is typically located within industrial estates that are frequently inquired by MNCs and located between 10 and 100 km of the metropolitan area. In addition, the land is also a single-user, single-development site, as opposed to one that is intended for parcellation for multiple users. 7. MONTHLy GROSS RENT FOR SINGLE-USER INDUSTRIAL SPACE This is the monthly rental payable to a landlord for a whole industrial premise by a single tenant. Data is expressed in per sq ft of gross floor area. A three year lease term is common in most countries in the Asia Pacific region. 6. MONTHLy GROSS RENT FOR HIGH-SPECS SPACE This is the monthly rent payable to a landlord less all tenant inducements e.g. rent free periods. It includes the amount of interest income foregone for the security deposit, maintenance fees (i.e. fees for maintaining common areas e.g. security, building insurance and normal water and energy consumption) and statutory real estate charges (e.g. property tax). Data is expressed in per sq ft of net floor area, which includes common areas such as toilets, corridors, stairways, lift lobbies, etc. A three year lease term is common in most countries in the Asia Pacific region.
This report and other research materials may be found on our website at www.colliers.com. Questions related to information herein should be directed to the Research Department at the number indicated on the back page.This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, express or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information.Colliers International excludes unequivocally all inferred or implied terms,conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from.Colliers International is a worldwide affiliation of independently owned and operated companies.This publication is the copyrighted property of Colliers International and /or its licensor(s). © 2010.All rights reserved.
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